Solana’s SOL Slides as LIBRA Controversy Adds to Memecoin Woes
The price of Solana’s native token, SOL, has taken a hit against both the U.S. dollar and ether (ETH) following the fallout from the LIBRA token debacle.
According to a report by Galaxy Research on Monday, the apparent rug pull of LIBRA is yet another blow to Solana’s memecoin ecosystem, which has faced growing skepticism in recent weeks.
The report noted that investor sentiment around Solana’s memecoin market had already started to deteriorate after the launch of the TRUMP token in January, which created a liquidity drain across the ecosystem. The LIBRA fiasco could further weaken investor confidence, potentially reducing demand for SOL itself.
Galaxy highlighted that SOL’s recent rally was largely fueled by speculation on SOL-denominated assets, particularly memecoins. However, the cryptocurrency has struggled since LIBRA’s launch, with its value dropping 8.6% over the past 24 hours to $168.73 at the time of writing.
Adding to the controversy, Argentina’s President Javier Milei has faced political backlash, including impeachment threats, after endorsing LIBRA as a tool for supporting small businesses. The token initially skyrocketed to a $4.5 billion market cap before collapsing by 90%.
“This is just the latest sordid episode within Solana’s memecoin frenzy, which has been in decline since peaking in January with TRUMP’s explosive rise to a $75 billion fully diluted valuation (FDV),” wrote Alex Thorn, head of firmwide research at Galaxy.
Hayden Davis, CEO of Kelsier and the creator of LIBRA, has admitted to launching both the LIBRA and MELANIA tokens. Davis further revealed that his team sniped both tokens immediately after their contract addresses were deployed.
“This was not a rug pull,” Davis claimed in an interview with crypto investigator Coffeezilla. “It was a plan that went horribly wrong, leaving me responsible for $100 million sitting in an account under my custody.”
